Capital Budgeting Analysis

Running Head: ABBREVIATED TITLE OF YOUR CHOICE (all caps) <Title> <Student Name> <Name and Section # of course> <Instructor Name> <Date> Capital Budgeting Analysis Superior Living Inc has been a big success of the past years. The company has been able to build a strong reputation amongst the clients resulting in a revenue generation of $250 million…

Introduction

This shows that the company has improved on the efficiency of the usage of the assets of the company. This is also depicted by an improving asset turnover over the three year period. In 2003, the company generated $1.25 of revenue for every $1 invested in the assets of the company. Moreover, the company is also maintaining a strong control on its administrative and selling expenses; this is depicted by an improving net profit margin. This signifies that the company has strong growth prospects in future and could pave it way to become the market leader in its line of products. Figure 1 Figure 2 Figure 3 Since the company has strong future prospects, the company can use the IPO to its advantage. It will provide Superior Living Inc with the much needed capital money for expansion of its product lines including the production facility. The ‘going public’ stance will also boost the awareness of the company products in the market and develop a whole new batch of potential customers. This can eventually lead to an increase in the market share of the company. However, once Superior Living Inc goes public, she will have to face a number of challenges as well. ...

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